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LOL @ Laffer Curve – Walter Block

Suppose we are on the upper part of the Laffer curve. That means that if the tax rate is lowered, greater tax revenues will accrue to the government.1 Stipulate that the state is an evil institution. This is a libertarian analysis, after all. Thus, we arrive at what must count at least, as an anomaly. A reduction in the tax rate is ordinarily counted as a pro liberty phenomenon.

It took me few minutes to recover from laughing before I could write this.

In English for the uninformed:

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

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Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

http://secret jack silverman

Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

http://secret jack silverman

Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

http://secret jack silverman

Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

http://secret jack silverman

Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

http://secret jack silverman

Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

http://secret jack silverman

Hi. I just googled “cia fascist murderers.” It was my first project upon starting my day. I am “unemployed.” You were the first search result to come up. You were easy to find!

Notice how economist above starts by throwing in a totally arbitrary stipulation, that we should just for kicks assume we are in a certain part of a curve of some type that no one knows what it is. So we are on not just a curve or the curve — but we are on the “upper part” of “the” curve, which is called the “Laffer” curve. I’m not laughing. I know very well that isn’t the point. But which curve is that? The “Laffer” curve. I am supposed to know what it is, right? They just throw in these arbitrary conditions.

I hope maybe to start following your website “fascistsoup,” but I usually just don’t remember to follow up on these things.

And of course when I originally searched cia fascist murderers —- that was a TOTALLY INNOCENT ACT. Or —— maybe I am an evil person looking for who would show up on such a serach. So, am I innocent? — or not?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

Michael Suede

The Laffer curve is an economic chart the shows when government raises taxes beyond a certain point, tax revenue falls.

What he’s saying is that, to a libertarian that thinks government is evil, a tax DECREASE when the government is already taxing beyond the top of this curve presents a conundrum.

Should the libertarian support the tax decrease knowing that it will increase government revenue? Or should he be against it?

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

josey

It’s also interesting to consider the traditional democrat/republican differences on tax cuts in general, from a business standpoint. The obvious and ubiquitous desire is for a low tax rate; less-considered is the real need for tax-stability. It is generally understood that business doesn’t enjoy tax hikes, so there is not much to discuss on that side of the question; they are inherently harmful, both for the obvious reasons, and equally for the reasons which I will lay out below.

Now, businesses never pay taxes: taxes are a cost of doing business and are factored into price in the same way as any other cost. So the absolute tax rate a business is subject to is immaterial. So we are left with the question of tax cuts. Are there any ill effects (other than pointed out by Block) which are inherently attributable to tax cuts? And the answer is: absolutely. How so?

Any given business has a single and optimum capital/risk ratio. This ratio, while an unknown at the time, is absolutely pivotal with regards to its ultimate success. Simply put, the main objective of a business manager is to attempt to gauge the market, and consequently, to plan for the future, in terms of capital expenditure and the demand he expects to satisfy using that capital. The best case scenario would be one in which all factors were fixed. The question is: how will the introduction of a tax cut affect his judgment?

Obviously, it will serve to skew his judgment toward over-capitalization; often, this is manifested through the mechanism of business debt and the tax benefits which can be realized via accelerated depreciation of the capital acquired with that debt. Depending on the magnitude of the distortion, the business may quickly find itself with too much equipment, too much inventory, etc., with respect to levels which were eventually found to have been supportable given the state of the market. Once this mistake is revealed, a hasty liquidation must occur, and if unsuccessful, bankruptcy may follow.

Of course, I am in no way arguing for tax increases; I am only analyzing the dark side of tax cuts and suggesting that all things considered, they are only slightly less evil than tax increases. As mentioned previously, a business neither makes a profit, nor a loss: salaries are taken, and the balance, whether positive or negative, is taken up in development, and in the price of its products, whether that means that losses are absorbed and manifest as higher price and reduced competitiveness, or vice versa.

Therefore, a truly business-friendly government would neither raise nor cut taxes; as such, it would allow business to make decisions based solely on the determination of whether or not they were smart, given the current market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

Michael Suede

I would disagree with that Josey.

Taxes take wealth from the private sector and transfer it to the public sector.

The public sector produces nothing of value and does nothing for economic productivity.

When government spends money, it is not spending it in a way that consumers want, its spending in a way government wants. This spending by government distorts market prices, distorts competition, and creates what Austrians call “misallocation of resources” within the market.

If individuals were left to spend the money as they saw fit, rather than government taking it from them and spending it on their behalf, the markets would be much more stable and prosperous.

I could simply point to the housing market as the prime example of this. Of course, the list of market interference by government is nearly endless. Medical care being the next major example of what happens when government gets involved in spending outside the market.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

josey

I completely agree — you might have misunderstood my meaning a bit. I was not in any way arguing in favor of taxation; were it possible for the only tax rate changes to be cuts, that would be fine with me — although such a scenario would still result in the distortions I outlined above, it would at least be a temporary condition, since the rate would eventually equal zero. That is not the case though, so to be clear:

best: no interference
better: a stable level of interference
worst: an unstable level of interference

The first implies an anarchical system where natural law is allowed to take its course. The second implies a minarchical system, where the cost of so-called order is steady and predictable; my view is that this is an inherently utopian vision, since I hold it to be an unalterable truth that any coercive form of government will always exhibit a tendency toward expansion. The third would represent what we see now, where one party raises the level of taxation, followed by the other then lowering it, over and over in an unending cycle. Taxation itself results in many different classes of misallocation; my previous comment attempted to focus only on those effects which are due solely to the unpredictable fluctuation in its rate.

So to sum up: while a tax cut is always a good thing, in that it represents an increase in the liberty of the people, that is likely its only desirable quality; it is not necessarily superior to an increase in terms of market distortion.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.

Vangel

The ‘conundrum’ does not really exist and Block knows it.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.

Vangel

The ‘conundrum’ does not really exist and Block knows it.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.

Vangel

The ‘conundrum’ does not really exist and Block knows it.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.

Vangel

The ‘conundrum’ does not really exist and Block knows it.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.

Vangel

The ‘conundrum’ does not really exist and Block knows it.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.

Vangel

The ‘conundrum’ does not really exist and Block knows it.

There are two ways of looking at the problem. One is strictly about the absolute size of the state. From that perspective reducing taxes is a bad idea because it provides the state with more revenue that can be used to grow government. But there is another view that looks at the size of government relative to private economic activity. From that perspective lowering of taxes can lead to a bigger government in absolute terms even as government shrinks relative to private activity. It was this view that allowed Reagan to support Congressional expansion of government. He hoped that in relative terms the growing government would still be smaller than before. As we now know, Reagan miscalculated and turned out to be wrong.